Leading a Virtual Organization Critical Decisions

To prepare for this Discussion, review the “Leading a
Virtual Organization” videos and Case Study Guide and consider the case
of business executive Dr. Craig Marsh. Consider how Dr. Marsh built
within his organization a culture of employee engagement, one that is
conducive to optimal performance management, and a leadership structure
appropriate to achieve his goals. Further, consider how Dr. Marsh took
into account the perspectives of researchers and practitioners before
creating his strategy.Post your analysis of the case study, specifically
the factors related to effective leadership within a global, virtual
organization. In your analysis, be sure to address the following
questions: What aspects of the academic and practitioner literature did you find particularly applicable to Dr. Marsh’s scenario?Whose seminal work would you adopt to help you form
your strategy to change the organizational culture of this virtual
organization?If you were in Dr. Marsh’s position, what is one
additional strategy you might have employed to more effectively lead or
develop this virtual, globally dispersed team? Provide a rationale for
your selected strategy. Be sure to support your work with a minimum of two specific citations from this week’s Learning Resources and one or more additional scholarly sources.
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DDBA 8151 Case Study Guide
Part 1: Theoretical Foundations
Employee Engagement: Researchers’ Perspective
Kahn (1990) approached the issue of employee engagement by drawing on theory of
self and how different selves interact with the roles people need to play at their
workplace. He postulated that “People can use varying degrees of their selves,
physically, cognitively, and emotionally, in the roles they perform, even as they maintain
the integrity of the boundaries between who they are and the roles they occupy.
Presumably, the more people draw on their selves to perform their roles within those
boundaries, the more stirring are their performances and the more content they are with
the fit of the costumes they don” (p. 692). Kahn drew on research from various
perspectives, such as interpersonal, group, intergroup, and organizational research, and
combined them with the job-design perspective developed by Hackman and Oldham
(1980). Kahn’s assumption was that as job design determined the roles individuals need
to play within a work setting, it was a key determinant of the “self” elicited from the
employees who play those roles. Job design was hypothesized to be instrumental in
determining whether an employee will use an engaged or disengaged self in role. He
defined the two opposite types of engagement as follows: “Personal engagement [is]
the harnessing of organization members’ selves to their work roles; in engagement,
people employ and express themselves physically, cognitively, and emotionally during
role performances. . . . Personal disengagement [is] the uncoupling of selves from work
roles; in disengagement, people withdraw and defend themselves physically,
cognitively, or emotionally during role performances” (1990, p. 694). Thus, according to
Kahn, engagement is a psychological reaction to the job role people are required to play
in their work, and it comprises three aspects of such a reaction: cognitive, affective, and
behavioral.
Rothbard (2001) had a more focused take on the issue of employee engagement and
proposed two critical components that distinguish an engaged from a disengaged
employee: attention and absorption. Specifically, attention was defined as “cognitive
availability and the amount of time one spends thinking about a role”; while absorption
“means being engrossed in a role and refers to the intensity of one’s focus on a role” (p.
656). This perspective lays more emphasis on the cognitive component of engagement
and is more akin to the concept of psychological presence, dedicated focus on the job,
and being away from any mental distractions that may lower job performance.
Maslach, Schaufeli, and Leiter (2001) had a different take on the concept of
engagement and viewed it as the positive end of a continuum, with job burnout on the
negative end. According to them, as burnout is characterized by exhaustion, cynicism,
and inefficacy, engagement is its polar opposite with characteristics of energy,
involvement, and efficacy. Schaufeli, Salanova, Gonzalez-Roma, and Bakker (2002)
went on to define engagement as “a positive, fulfilling, work-related state of mind that is
characterized by vigor, dedication, and absorption” (p. 74). To them, such a heightened
© 2016 Laureate Education, Inc.
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state of vigor, dedication, and absorption is neither a momentary high, nor target
specific, but a highly persistent and pervasive affective cognitive state.
Thus, we see that besides the obvious similarities there are slight but extremely
significant differences in which the above-mentioned researchers have conceptualized
the construct of engagement. For Kahn (1990), job engagement is pretty role specific,
and it is in fact the role that determines what type of self will be elicited (engaged versus
disengaged). The state of engagement or burnout is pretty diffuse and long lasting
(pervasive and not targeted) according to Schaufeli et al. (2002). However, they agree
on the belief that bad job design may be the contributing factor for disengagement
(according to Kahn) or burnout (according to Maslach et al., 2001).
To compound the problem, various definitions of engagement do not take enough care
to distinguish the concept from other similar constructs such as job involvement, job
commitment, and organizational citizenship behavior (OCB). There are questions
regarding whether engagement is an attitude (having three components of cognition,
affect, and behavior and similar to the concept of job satisfaction) or whether it is more
akin to motivation (a heightened state of goal-directed behavior as in vigor).
Practitioners do not have too much problem with the issue as long as the construct can
be reliably used to predict and manage team or organizational performance. In the
following section, we will see how some of the practitioners in this field have defined
and used the construct of engagement.
Employee Engagement: Practitioners’ Perspective
When it comes to measuring and defining engagement, the foremost name in the
practitioners’ world is Gallup, Inc., which developed the Gallup Workplace Audit (GWA,
popularly known as the Q12), a questionnaire used to measure employee engagement.
It comprises 12 questions, plus an overall satisfaction question making it a 13-item
questionnaire. The questionnaire items were found to have a highly significant relation
to unit-level measures of a company’s performance (Harter, Schmidt, & Hayes, 2002).
Thus, rather than being driven by theory, Gallup’s approach has been more empirical.
The items in the questionnaire are a measure of attitudinal outcomes (satisfaction,
loyalty, pride, customer service intent, and intent to stay with the company) and
measure issues that are within the remit of a supervisor in charge of a given business
unit. Gallup compiled rich data of employee surveys for over 30 years, and based on
their understanding of employee behavior that had maximal impact on a firm’s
performance, they defined engagement as “the individual’s involvement and satisfaction
with as well as enthusiasm for work” (2002, p. 269).
Based on their national survey of U.S. workers using their engagement questionnaire,
Gallup put forward three types of employees (Krueger & Killham, 2006):
? Engaged employees work with passion and feel profound connection to their
company. They drive innovation and move the company forward.
© 2016 Laureate Education, Inc.
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?
?
Not-engaged employees are essentially “checked out.” They are sleepwalking
through their workday, putting time—but not energy or passion—into their work.
Actively disengaged employees aren’t just unhappy at work, they are busy acting
out their unhappiness. Every day, these workers undermine what their engaged
coworkers accomplish.
Perrin (2007) has also preferred to rely on survey data and define employee
engagement in terms of the preferred characteristics that engaged employees exhibit as
different from the non-engaged employees. Perrin highlights three key features of an
engaged workforce:
? Rational/cognitive understanding of the organization’s strategic goals, values,
and their “fit” within it (also known as the “Think” sector)
? Emotional/affective attachment to the organization’s strategic goals, values, and
their “fit” within it (also known as the “Feel” sector)
? Motivation/willingness to do more than the minimum effort in their role (i.e.,
willingness to invest discretionary effort, to “go the extra mile”) for the
organization (also known as the “Act” sector)
Perrin’s view of employee engagement is similar to that of Gallup in one major way:
aspects of employee characteristics (cognitive, affective, or behavioral) that have been
found to enhance the performance of a given business unit.
Some other well-known research and consultancy organizations too have defined
engagement along similar lines and emphasized the importance of discretionary effort
as the key outcome or distinguishing feature of an engaged employee. The Institute of
Employment Studies defined engagement as follows:
A positive attitude held by the employee toward the organization and its values.
An engaged employee is aware of business context, and works with colleagues
to improve performance within the job for the benefit of the organization. The
organization must work to develop and nurture engagement, which requires a
two-way relationship between employer and employee. (Robinson, Perryman, &
Hayday, 2004, p. 2)
The Conference Board offers a synthesized definition that sees employee engagement
as “a heightened emotional connection that an employee feels for his or her
organization that influences him or her to exert greater discretionary effort to his or her
work” (Gibbons, 2006, p. 5). This definition of engagement is derived from the common
scale items used by its various clients to measure the engagement level of their
employees.
The Chartered Institute of Personnel and Development (n.d.) holds similar views on
employee engagement and refers to it as “a combination of commitment to the
organization and its values, plus a willingness to help out colleagues (organizational
citizenship). It goes beyond job satisfaction and is not simply motivation. Engagement is
something the employee has to offer: it cannot be ‘required’ as part of the employment
contract.”
© 2016 Laureate Education, Inc.
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We may say that all the practitioner and consultancy views on engagement are largely
driven from their respective survey data and are much more empirical when compared
with how the researchers have approached the construct. The practitioners look for key
differences in employee surveys between high- and low-performing business units, and
the items that significantly related to performance form the core of what they call
engagement. There are two major problems with this approach:
1. Most of these survey-based research tend to infer causality from their survey
data in a way that their engagement items are presumed to “cause” performance,
not merely correlated with it. However, there is very little in their research design
to make such a strong assertion.
2. There is little “construct validity” behind these items being clubbed under a single
name of engagement as the scale items are not embedded in theory in the first
place. So, though all the above-mentioned consultancies use slightly different
items in their measures, they all label it as “engagement.”
Performance Management
Performance management has been regarded for several years now as a core
management best practice (Osterman, 1994; Pfeffer, 1998). Den Hartog, Boselie, and
Paauwe (2004) define it thus, making clear the relevance of an integrated approach to
performance:
“Performance management” has come to signify more than a list of singular
practices aimed at measuring and adapting employee performance. Rather, it is
seen as an integrated process in which managers work with their employees to
set expectations, measure and review results, and reward performance, in order
to improve employee performance, with the ultimate aim of positively affecting
organizational success. (p. 556)
It is remarkable, however, how little is still known of the effects of performance
management techniques on the individual employee (Farndale & Kelliher, 2013). This
has been a space often referred to in the literature over the years as the “black box” of
the HR/organization performance relationship (Legge, 2001). One reason for this
relative dearth of information is the limited amount of research directed at understanding
implementation of performance management techniques (Guest, 2011). Boselie, Dietz,
and Boon (2005) argued that most studies of the impact of performance management
practice orient toward the macro, or “managerialist,” perspective, with a dearth of
studies of the role of the immediate line manager or supervisor “in the enactment
process” (p. 74). They recommended research oriented increasingly toward micro
analyses which seek to understand in much greater depth “employees’ actual
experiences of performance management” (2005, p. 82).
It has also become increasingly recognized that the role of the first-line manager is
crucial in successful implementation of performance management practices (Nehles et
© 2016 Laureate Education, Inc.
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al., 2006) or “unlocking the black box” as these practices are increasingly delegated to
line managers to implement in the modern organization (Purcell & Hutchinson, 2007).
One such technique of performance management is performance appraisal, one in
which first-line managers have a central role to play, and one which is a constant source
of dissatisfaction among managers and employees, despite its widespread use
(Dusterhoff, Cunningham, & MacGregor, 2014).
Employees’ perceptions of fairness and procedural justice play a key role in employee
outcomes considered crucial to organization success, such as decision making (Goksoy
& Alayoglu, 2013) and commitment and engagement (Cheng, 2014). The immediate
supervisor of the employee is a key factor in the success of the process of performance
appraisal, and a critical influence on employee perceptions of fairness and justice
(Byrne et al., 2012; Sumelius et al., 2014).
Part 2: Leading a Virtual Organization
Dr. Craig Marsh is a business executive with over 25 years of experience in
organizational leadership, development, and change, across a number of industries. In
this case study, Craig will present a real-world leadership challenge based on his
professional experience that will allow you to place yourself in the same situation and to
explore in-depth some of the questions that inevitably arise: Would you have made the
same decisions? What does the case tell you about the nature of the modern
organization and its opportunities for value creation, as well as its limits? And what are
the questions it raises for both senior and frontline leadership in the 21st century?
The Case
Five years ago, I took over a business unit that consisted almost entirely of people
working virtually. I had nearly 500 people working for me who lived all over the world
and worked remotely. They were all directly customer facing, and—most significantly—
they were not employed directly by my organization, but were contracted to us, mostly
on a part-time basis.
To provide some context, our organization had grown rapidly over the previous 4–5
years and was confronting a classic consequence of that growth—a start-up culture now
requiring scalable structures and processes to ensure that growth and service
standards were maintained consistently. As a leader, I inherited very little structure,
other than some early attempts at putting in place performance indicators and quality
standards, as well as established central units for monitoring service quality. I also had
a small group of divisional directors reporting to me, each of whom were in charge of a
subunit of my structure with specific and differentiated customer value propositions.
One of my biggest challenges, however, was the very “loose” structure of contracted
service professionals who provided the main value work to our customers. These
© 2016 Laureate Education, Inc.
Page 5 of 9
service professionals were highly educated and experienced, multinational, working
remotely from anywhere in the world, were mainly part time, and had a tenuous
connection to the company. Legally, there were strict constraints on treating them as
employees, for fear of violating local tax laws. Because of this, it was very challenging to
promote employee engagement and build trust across the team, accurately evaluate
performance for all staff, and establish an appropriate leadership structure for this
unique situation. I faced a number of questions and set myself the following three key
challenges:
1. How do I introduce a culture of engagement?
2. How do I create an effective process for performance management?
3. How do I build a leadership structure appropriate for my particular
circumstances?
© 2016 Laureate Education, Inc.
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References
Boselie, P., Dietz, G., & Boon, C. (2005). Commonalities and contradictions in HRM and
performance research. Human Resource Management Journal, 15(3), 67–94.
Byrne, Z. S., Pitts, V. E., Wilson, C. M., & Steiner, Z. J. (2012). Trusting the fair
supervisor: The role of supervisory support in performance appraisals. Human
Resource Management Journal, 22(2), 129–147.
Chartered Institute of Personnel and Development. (n.d.). CIPD—Championing better
work and working lives. Retrieved from http://www.cipd.co.uk/
Cheng, S. Y. (2014). The mediating role of organizational justice on the relationship
between administrative performance appraisal practices and organizational
commitment. International Journal of Human Resource Management, 25(8),
1131–1148.
Den Hartog, D. N., Boselie, P., & Paauwe, J. (2004). Performance management: A
model and research agenda. Applied Psychology, 53(4), 556–569.
Dusterhoff, C., Cunningham, J. B., & MacGregor, J. N. (2014). The effects of
performance rating, leader–member exchange, perceived utility, and
organizational justice on performance appraisal satisfaction: Applying a moral
judgment perspective. Journal of Business Ethics, 119(2), 265–273.
Farndale, E., & Kelliher, C. (2013). Implementing performance appraisal: Exploring the
employee experience. Human Resource Management, 52(6), 879–897.
Gibbons, J. M. (2006). Employee engagement: A review of current research and its
implications. New York, NY: The Conference Board.
Goksoy, A., & Alayoglu, N. (2013). The impact of perception of performance appraisal
and distributive justice fairness on employees’ ethical decision making in
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